D77/100FDD 2026
Line-X — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Elevated Risk
22 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
22
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
77 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
167
Government-backed loans issued
Default rate
14.4%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
19 loans
Loans charged off or defaulted
Total loan volume
$38.8M
Avg loan size
$232K
Participating lenders
86
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 77/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 21.1% YoY (142 units) indicating system contraction and potential franchisee struggles
- 02HIGH18 pending litigation actions primarily over non-compete disputes and 2024 system conversion suggests franchisor-franchisee conflict and operational disruption
- 03MINORNo average revenue or net income disclosure (Item 19) prevents assessment of unit profitability and ROI
- 04MINORHigh initial investment ($401K-$1M) combined with declining unit count increases financial risk for new entrants
- 05MINOR2024 conversion to royalty-based model appears contentious—multiple lawsuits filed; unclear if new model sustainable
- 06MINORWashington state consent order indicates regulatory scrutiny and past compliance issues
- 07MINOR6% royalty on bedliner services (primary offering) reduces net margins in already-thin service businesses
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.